Corporate strategy and competitive advantage of investment banks in Kenya

Abstract

Corporate strategy includes the approaches of a firm in attracting customers, withstanding competitive pressure and improving its market position (Thompson & Strickland, 2002). A company has competitive advantage whenever it has an edge over its rivals in securing customers and defending against competitive forces (Thompson & Strickland, 2002). Competitive advantage is born out of core competencies that yield long term benefit to the company. Past studies have illustrated the importance of competitive strategies but there is need to investigate the corporate strategies adopted by investment banks for competitive advantage. This creates a gap that sought to be addressed by the current study. What is the relationship between corporate strategies and competitive advantage in investment banks in Kenya? The study adopted a descriptive study design to survey a sample size of 14 investment banks using a semi – structured questionnaire. Data capture, cleaning, analysis and storage was done using Statistical Package for Social Sciences (SPSS-V20). The results were presented using tables, bar charts, graphs, pie charts and narrative texts. Asked to state which strategies the investment banks have adopted, 7 in every 10 investment banks responded by indicating that they have adopted investment strategies while slightly more than half (57%) have adopted talent management and marketing strategies each. Exactly half of the investment banks interviewed (50%) have adopted diversification strategy, ICT and financial strategies each. That the Chief Executive ensures goal congruence in the strategy adopted by the company scored the highest rating by the respondents (4.71, 94%). Besides the findings on the investment banks’ leadership, the respondents’ role in the implementation and communication of strategy (4.29, 86%), the role of shared resources in motivating corporate strategy (4.15, 83%), the support provided by transferred competencies in the implementation of corporate strategy (4.15, 83%) and broadening of companies’ product/service offering range (4.07, 81%) were also rated highly by the respondents. It was also found that investment banks are at least 8 times (out of 10) likely to implement competitive strategies including customer-care, product diversification, analyst coverage, innovation and information technology strategies. However, branch and regional expansion as well as fee and price competition are competitive strategies less likely to be adopted by the banks. Further, the relationship between competitive advantage and corporate strategy used by investment banks in Kenya are such that the there exists a significant relationship between competitive advantage and corporate strategies, innovative strategies, customer management strategies, products and service-strategies.